Focus Financial Partners said Monday that its longtime CEO, Rudy Adolf, was stepping down from his role and turning over his title to interim chief Dan Glaser, the operating partner at Clayton, Dubilier & Rice, which bought Focus earlier this year and took it private. The deal closed in August in what Focus said was an all-cash transaction for an enterprise value in excess of $7 billion. Stockholders were to get $53 per share in cash.

Before joining CD&R, Glaser was the president and CEO of Marsh McLennan. Glaser's appointment and Adolf's departure continues a trend of private equity firms installing their own executives at the top after taking controlling interests in RIA acquirers. 

Focus is one of the RIA business's largest aggregators of wealth management firms, offering resources and continuity planning for its partner firms. Adolf founded the firm in 2004. It had six partner firms by 2006, and the company now has 90 firms in 38 states and overseas, including Buckingham Strategic Wealth, the Colony Group, Summit Financial and Telemus Capital.

Adolf, who had previously served as a senior partner at McKinsey, was known for his ability to aggressively acquire RIA firms in the pre- and post-Great Financial Crisis era. While Focus grew very quickly, the firm permitted advisors to retain most of their business systems, independent practices and technology. Consequently, it was not able to obtain operating leverage even as it grew. Observers in the RIA industry expect Glaser and whoever might succeed him to look for cost savings and other synergies.

The top firms in the Focus network like Buckingham and the Colony Group that are rapidly growing and acquiring other firms are also expected to enjoy a greater say in the RIA giant's future operations. One past criticism of Focus was that the founders of the firms it acquired cashed out most of their equity and didn't exert themselves going forward.

The deal with CD&R was looked at askance by ratings agencies, which said that the deal elevated Focus’s debt ratios.

Moody’s Investors Service downgraded Focus’s corporate credit rating in May, saying: “The downgrade reflects the impact the new LBO-related debt will have on Focus's leverage ratio (debt/EBITDA including Moody's standard adjustments), which will rise to 6x from its current level of 5.1x as of year-end 2022. Moody's expects the company's leverage ratio (debt/EBITDA including Moody's standard adjustments) to remain elevated over the next couple of quarters as higher market volatility and tighter financial conditions slow revenue growth at Focus's existing partner firms and acquisitions of new partner firms.”

Some shareholders in the formerly public Focus were also not too happy about the deal, and said it favored majority shareholder Stone Point Capital at the expense of disinterested shareholders. In July, three pension funds sued Focus in a Delaware state court hoping to get a closer inspection of the deal terms, saying the $53 share price did not maximize shareholder value and that there were conflicts of interest.

Investment bankers, meanwhile, have remarked that wealth management firms’ new private equity owners are taking more aggressive stances and replacing leadership, in some cases, kicking them upstairs.